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BooksAndArticles

What other rabbit holes have you fallen into?

jasonb

I would say in relation to Bitcoin specifically I fell down the wtfhappenedin1971, the Federal Reserve bottomless pit, the home solar market and thr FX trading rabbit holel

econ

I was curious about this, as many mainstream pundits are starting to say 'put at least a small allocation of your portfolio into Bitcoin'. For many this allocation would probably be at the expense of investing into the S&P 500 etf so I was wondering what that growth might look like.

Per ChatGPT, the best performing 10 year stretch (because I want to know some real long term growth) for the S&P was 1949-1958 in the post WWII expansion period. It had an annualized return of 17.9%, which means if you started with $10k you would have $51896 at thr end of it, a 419% increase. Not neglecting ever present inflation which was 21-22% reportedly, the purchasing power would make it like $42500, which would be a 325% increase in real.purchasing power over the best 10 year stretch of the S&P'S lifetime.

Now, this is the best, the absolute BEST the S&P has ever done and it was over 75 years ago after the most destructive war in history. Not thinking these conditions are really in the cards again, so let's look at the WORST performing stretch of the S&P, to give us a bit of a bottom hopefully. Again, per ChatGpt that would be 1999-2008, when the annualized return in both the dot com bust and GFC was -3.8%, which means if you started with $10k you would have $6788 left in 2008, a total -32% decrease even with returns reinvested. With inflation at 26% for the decade that means the real purchasing power an investor would get at the end of it would be $5390,  or a -46% decline in real purchasing power over the worst 10 year stretch of its history.

Now, enter Bitcoin. I'm not going to do a 10 year analysis of its 10 year annualized return since it is so early in its history. I myself haven't even done a full 10 years invested in BTC, having been in since 'only' 2017. I had heard whispers of it a few times before than, in passing on message boards and when MtGox rose and fell, and felt it was mature enough at that time that I could feel comfortable enough throwing in some money I didn't need at that time and it would still be there later. With BTC and BTC products/stand ins being a significant part of my retirement portfolio (not going to argue thats NOT risky, was one of the only ways to get exposure via 401k funds), my retirement savings have risen significantly. Not quite 325% but not -46% either.

With these being the upper and lower limits to gains and losses with the 'safe' S&P etf allocation, the question now becomes do you think BTC will rise more than ~18% a year? Or have a loss of less than 32% at the end of 10 years. As Bitcoiners, since we are all here I think we feel we know what the answer to that will be. Now its more a matter of if it does and what others will say when they realize safe isnt going to be so safe anymore, since inflation from 2015 to now is estimated to be 35-45% on the core side of things....



How much does Bitcoin beat the best performing S&P?

AskSN

In one sentence, what is your life's story?

k00b

I want to help people however I can to the best of my abilities, thats why I have worked in the Operating Room for 15 years now and became an RN right before Covid started up




And no, its probably not what you might think

I just went to take a memorial trip to the Concentration camp Dachau in Germany. We made a trip of it to see other things but felt a tour here needed to be done.

I'm glad I did it. Across many memorials the site itself is littered with, the words "Never Forget" and "Never Again" ring through most prominently. However, as we went through the site tour (has to be done with a guide, not on your own), I came across some very disturbing facts.

The atrocities committed, that jumps out at people. Over a quarter million people going through its gates at one time or othrt, and almost 50000 dead out of those. Despite those numbers, it wasnt these that shocked me, as Dachau was actually never meant to be a 'killing camp' like Ausweitz/Birkenau or Treblinka. No, the fact about the camp that shocked me was that they advertised when it was opened, back in 1933. Then, it wasnt necessarily for just the 'undesireables', the typical victims we are taught, it was also for political opponents of the Nazi Party as well.

The shock kept coming, as there was an origin history of Dachau as a camp as well as the rise in power of the National Socialist movement in Germany. Going to the NS-Dokumentationszentrum München, the museum in Munich detailing Hitler's rise to power, filled in more gaps. I had read a bit about the hyperinflation of the Weimar republic, but never really made the connection the failure of fiat was directly responsible for the rise of Nazism here, and ultimately the creation of the concentration camp.

Another surprising fact, the Nazis never had any majority in parliamentary representation before Hitler ultimately became a dictator. There were emergencies and political maneuvering done to have been taken advantage of, yes. But the economic conditions of first the Treaty of Versailles in 1918 and then the Great Depression in 1929 were enough that ordinary people were too focused on merely surviving themselves and with their families, so there were too few to oppose them either legally or with physical force. With the Nazis promising help ultimately to the country, it brought more people onto their side. Not a lot more people would be willing to oppose a government that helped literally feed their family, especially with the other option being imprisonment once they controlled the country's political system.

I'm sure there are other, more insidious reasons why someone may end up helping a blood thirsty dictatorship, but i believe this is a crucial intersection, where ideology meets practicality. To paraphrase, human governments are only 9 meals away from anarchy at all times, and the government that cannot supply stability will be replaced. Plus, while there are undoubtedly people who will embrace the evil (pointed out by the trials and testimonies of thr prisoners in the camp), as my tour guide pointed out, none of this could have been done without the aid of the ordinary people. 

And if the ordinary people are financially hamstrung and just trying to survive, there isnt any incentive to pay attention to the big picture beyond their own soup bowl. Which is why having a decent economy can be considered essential to civilization, because if there is no development in a positive direction, there tends to be growth in what will turn out to be a negative direction.













